Kathy Jackson mounts defence on time lapse since alleged fraud

Nick Toscano

Controversial unionist Kathy Jackson will attempt to avoid a $700,000 lawsuit against her by mounting part of her defence on the grounds that the alleged misuse of members' funds happened too long ago.

Ms Jackson, who is being sued by the Health Services Union in the Federal Court, filed a statement of defence on Friday, which strongly rejects the damning allegations against her.

The union claims Ms Jackson misused her office and misappropriated $250,000 of union money in a slush fund she created called the National Health Development Account.

The former union boss and whistleblower, who has been on extended leave from the HSU, said in her statement that the actions during each incident in question had been "rendered valid" under organisational law because they happened more than four years ago.

Under the Workplace Relations and Fair Work acts, an organisational officer's actions are validated after four years unless the Federal Court believes that to do so would cause "substantial injustice" to the organisation or anyone associated with it.

The royal commission into trade governance has heard detailed evidence about the slush fund created by Ms Jackson. The evidence included details about the seed money coming from a $250,000 settlement with the Peter MacCallum Cancer Centre after a 2003 dispute over back-pay.

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Ms Jackson told the commission she spent some of that money on herself, but she said she had been given authorisation from her branch committee of management.

She also admitted that $50,000 had been gifted to her former husband Jeff Jackson.

Ms Jackson was forced to amend and strike out sections of her earlier statement of defence filed in the court after being warned by Judge Richard Tracey. Her defence had reportedly claimed the HSU's lawsuit was retribution for her efforts to expose more union members connected to a corruption racket.

Ms Jackson, who rose to national prominence exposing rampant corruption in the HSU, has come under growing scrutiny for her own conduct.